A government agency asks Rain to withdraw its merger proposal with Telkom
A government body has censured Rain for proposing a merger with bigger rival Telkom SA without seeking prior approval. A South African billionaire's company, Rain, said on Thursday it was merging with Telkom to thwart MTN's plans to purchase Telkom.
It was announced by Rain without the required prior approval, according to the country's Takeover Regulation Panel." We have instructed Rain to retract its announcement for it to have been published in violation of the law."
it said."Under these circumstances, it is advised that all parties and the market disregard the announcement."The country's second-largest telecom organization MTN said last month it was in talks with Telkom over a stock or cash-and-share deal, which could overtake bigger rival Vodacom.
The acquisition would likely fail to pass muster with the Competition Commission due to its potential to create a virtual duopoly. With its proposed merger with Telkom, Rain said it would create a more competitive telecom landscape with three large players.
"It is a logical alternative to simply selling to MTN and would also be consistent with government pro-competitive policies," Rain said. In a separate statement, Telkom said that it had not received any proposals from Rain after the announcement.
Through Africa Rainbow Capital Investments, Mostsepe operates a diverse business network that includes mining, financial services, telecom, renewables, and investments in start-up companies. Among his fastest-growing companies, Rain offers 4G and 5G data services. The company claims to have one of the world's largest 5G networks covering more than 6 million homes worldwide.